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Brussels considers a EU-wide "deposit guarantee scheme" to be funded by a new tax on banks,...

  • Sunday, May 27, 2012, 8:40 AM ET
    Brussels considers a EU-wide "deposit guarantee scheme" to be funded by a new tax on banks, reports the Sunday Times. Top brass feels removing the threat of bank collapse can check the spread of contagion from Greece to Spain and beyond. It seems, however, Greek fears are less about deposit risk and more about denomination risk, i.e. waking up one morning to find your euro deposits converted to drachmas.
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This news story has 19 comments:

  •  
    " It seems, however, Greek fears are less about deposit risk and more about denomination risk, i.e. waking up one morning to find your euro deposits converted to drachmas."

    Makes little difference, since depositor action to protect himself would be the same: withdraw funds and put someplace safe from either deposit loss or re-denomination.
    27 May 2012, 08:47 AM Reply Like
  •  
    I agree. "this in fact my accelerate the collapse" rather than help stop it. FDR did try a "bank holiday" which worked for while...until it didn't. Moreover there are MASSIVE bureaucracies that need funding in Europe. Saving depositors doesn't save Greece...
    27 May 2012, 09:48 AM Reply Like
  •  
    Exactly right. Deposit loss, re-denomination risk, capital control risk, etc. all result in the same action by depositors, namely rational action to move their funds to safer countries.
    27 May 2012, 11:15 AM Reply Like
  •  
    Greeks have been keeping the cash in the Mattress for a long time.. centuries...they are wise people...
    They should be taking out their cash...closing the shutters and moving to Australia and Canada...leave Grandma to keep the farm ..and come back when the Drachma has dusted herself off...
    27 May 2012, 09:13 AM Reply Like
  •  
    Yes, those Greek sure are wily. Look how successful they've made themselves and their country by all their clever actions, like "mattress banking." In fact, we have an element of investors here (U.S.), who think that's a good recipe for success, too. And, they'll reap the same economic result for themselves.
    27 May 2012, 11:38 AM Reply Like
  •  
    How about the USA? Canada is at full capacity.
    29 May 2012, 12:59 AM Reply Like
  •  
    It is not fears. It is real and reality. No one wants to be last on the sinking ship.
    27 May 2012, 09:15 AM Reply Like
  •  
    Do you think they will have women and children get off first?
    27 May 2012, 09:28 AM Reply Like
  •  
    The fact that the EU political psychopaths are hopelessly and irrationally contorting themselves in seeking any solution other than a Greek default or exit, only indicates that the goal is of, for and by the banks; screw the people; debt slaves have no rights, dontcha know.
    27 May 2012, 09:41 AM Reply Like
  •  
    People are already screwed which is always a truism when an economy fails. On the other hand it appears they screwed themselves asking for early retirement and a lot of unfunded benefits and rode the economy into the ditch. Why should anyone feel sorry for them they created their own mess?

    The banks will take losses up through earnings and capital and then the government will own the banks which means the people bought their own loans. This is the financial circle of life.
    27 May 2012, 05:27 PM Reply Like
  •  
    Gosh, I get tired of your wretched populism ....

    It is quite rational to keep Greece in the monetary union.

    There is no such thing as a debt slave. Debt is voluntary.
    28 May 2012, 12:08 AM Reply Like
  •  
    The banks are broke and the brainiacks want to impose a new "tax".
    Amazing.
    Shut the damn things down and stop screwing the people as the "tax" will be passed on to them anyway.
    27 May 2012, 09:44 AM Reply Like
  •  
    I don't see anything the leaders are doing that would inspire confidence in the regular citizen.
    27 May 2012, 11:01 AM Reply Like
  •  
    PT
    I assume you are talking globally and I agree with you.
    Sad that the so called "leaders" have failed so miserably as they have put their own personal interests above the well being of the people.
    27 May 2012, 11:17 AM Reply Like
  •  
    They are not 'leaders'; they are die-hard card-carrying bureaucrats. The structure of the EU basically imposes a huge layer of extremely expensive and unproductive bureaucracy on top of the participating nations. Worse still, how could one expect countries with age-old different cultures to change in a loosely-defined 'federation'?
    27 May 2012, 11:17 AM Reply Like
  •  
    Wyo,

    Yes, I was referring to European 'leaders' although it could apply to other areas.
    27 May 2012, 12:23 PM Reply Like
  •  
    Don' t you love the use of the word "scheme" - as it seems to accurately describe pretty much all the actions that the EUROCRATS have taken for several years now. One "scheme" after another with nary a substantive solution to be found.
    27 May 2012, 11:57 AM Reply Like
  •  
    Wmarkw Why don't you send these bunglers some of your wisdom and experience sense the need it so badly? No sarcasm but a smile for picture brings a smile to my face thinking about that time frame and all the back room deals going on.
    28 May 2012, 04:19 AM Reply Like
  •  
    Ahh, the smell of another TARP, this time EU style...
    27 May 2012, 07:29 PM Reply Like
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